The Best Small Business Ideas in Colorado: Start One Today
There are a lot of great business ideas to launch in the Centennial State. According to the Colorado SBA, the top 5 small business industries are as follows:
- Professional, Scientific, and Technology Services
- Real Estate, Rental, and Leasing
- Construction
- Retail
- Health Care and Social Assistance
Colorado is one of the most business-friendly environments and is surrounded by stunning views and world-class recreation spots. Over the past several years, small business startups have increased faster than the national average. Healthy foods, snow sport lessons, foreign cuisine, and tourist shops all do very well in Colorado. These are just a few options to consider if you’re looking for successful Colorado business ideas.
We’ll cover some of the best small business ideas in each industry below. No matter what kind of business you’re starting, MyCompanyWorks can help you start a Colorado Limited Liability Company (LLC) or Corporation in as little as one business day. Read our guide and find helpful tips to start and manage a profitable business.
Colorado Technology Services
Starting a tech service business in Colorado has become increasingly popular over the last several years. App and other software development, hardware repair, and networking services are just a few successful business categories. If you have advanced computer and tech skills, these types of businesses are excellent startup options. You may need to invest in hardware and software right away, but you can recoup those costs rather quickly. You can also reduce overhead by running a home office. Working over the internet means you can hire staff, but pay them to work from home or from an affordable co-working space.
Real Estate, Rental, and Leasing Agencies
Cities like Denver have grown dramatically in both population and opportunity, but there are other up-and-coming communities that beg for real estate and property management services. Some popular real estate opportunities are:
- House flipping
- Real estate and/or property management firm
- Real estate appraisal
- Real estate photography
- Short-term rentals (like Airbnb, VRBO)
- Real estate wholesaling
- Estate sales
The real estate market is hotter than ever and evolving rapidly. Traditional real estate agents and brokers are still valued, but we’ve watched the real estate industry grow to embrace other avenues like house flipping, short-term vacation rentals, and wholesaling. These latter business ideas don’t require agent or brokerage licensing, although you will need to register your business to operate.
Property appraisals are in high demand, and you may be able to get your certification online. You might be required to train with a senior appraiser, but once you’re trained, you can set your own schedule and work independently. On average, real estate appraisers rake in between $37,000 – $87,000 annually in Colorado.
Real estate photography is another hot Colorado business idea. The industry in general offers a lot of variety and flexibility, so research other photography business ideas to find your niche. With digital equipment, you can shoot multiple properties and upload photos quickly. The salary range for Colorado real estate photographers is roughly $42k – $53k annually.
Estate sales are a tried and true money maker. As of 2019, the average estate sale business performed about 31 sales a year and average a commission rate of 37%. Colorado retirement communities are a hotbed for estate sales, and the business is worth researching. You can make a considerable side-hustle without working full-time.
Colorado Construction Business Ideas
According to the US Census Bureau, the construction industry is ranked 3rd for business applications in March 2022. As another industry that covers a wide variety of products and services, there’s a lot of opportunity in this category. A General Contractor is usually licensed to handle all phases of construction, but it takes all kinds of trades to get the job done. So you have options when it comes to deciding on the right business for you.
Manufacturing, remodeling, carpentry, and installation services are in demand. Construction cleanup services are also popular, as every construction site leaves a trail of dust and debris. If you like to work with your hands and have a passion to build things, starting a construction business in Colorado may be just the right fit for you.
Colorado Business Resources
Starting a Business in Colorado: LLCs, Corporations, DBAs | How to Get the Best Small Business Ideas | Choose Your Business Entity
Great Retail Ideas
The retail industry in Colorado continues to grow, in both brick-and-mortar and online forms. Retail shops with a focus and health and wellness are exploding, and small-batch skin care products, teas, gourmet snacks, and sustainably farmed coffee are just a few food items that are popular in the Centennial State. Clothing stores that offer organic, recycled, and upcycled apparel are incredibly successful and also draw a huge presence online. Unique bookstores, home goods, and stores selling local products are also welcomed retail ideas. Options for a retail shop are almost endless. You can search colorado retail business ideas to find other inspirations.
Health Care and Health-Related Businesses
Especially since the pandemic, there has been a huge push for better healthcare and self-care across the US. Colorado is no different, and perhaps one of the leaders in the industry. According to the Centers for Medicare & Medicaid Services, health-related spending should continue to grow at a rate of roughly 5.5% each year through 2026.
Colorado has been long-known as a relatively health-conscious state, so many people are always looking for products and services to improve overall health and well-being. Whether it’s a new supplement, a diet app, or a home health aid business, Colorado could be a great state to start your business.
How to Launch the Best Business Ideas
If you’re ready to start a business in Colorado, read on for steps and tips to get started. In this section, we’ll cover how to form a Colorado LLC, Corporation, or DBA for your startup.
Start a Colorado LLC, Corporation, or DBA
1. Choose a Business Entity Type and Name
An effective business name
Naming your business may not seem like a big decision, but it’s important to give it thought and search the Internet to see if it’s already in use (follow these instructions to research your business name). Companies sue each other over similar names, so using a unique business name can prevent confusion and potential lawsuits or tax issues.
Common business entities
The most common business type for startups is the Limited Liability Company or LLC. The LLC is considered the most flexible easily managed business entity. If you’re not sure which option to choose, you can consult with an accountant or lawyer to help you make the decision.
- LLC (Limited Liability Company): The most popular business structure for startups. Starting an LLC keeps taxes low and ownership flexible. In this setup, you don’t have to file a “business” tax return each year but report profits and expenses on your personal taxes instead.
- Corporation: The Corporation entity type is usually only necessary for larger companies or businesses with complex models. Qualifying corporations can file for Subchapter S – or “Small Business” status with the IRS, so you’re still taxed as an individual. In our experience, the Corporation structure can be overkill for a small company, so be sure to contact an attorney or accountant before forming a Corporation.
- DBA: DBA stands for “Doing Business As”. You can apply to use a distinct name to run your business without starting an LLC or Corporation. There is no liability protection with a DBA, so unless you apply for an Employer ID Number (EIN), you’ll be required to use your personal social security number on all business, legal, and tax documents. DBAs are only required to have an EIN if you hire workers, but you can still apply for one to use in place of your personal information.
Talk to a tax professional to decide which entity type is right for your Colorado business
2. Develop a Business Plan
Do I really need a business plan?
Yes, a business plan will help you get funding for your idea. A well-crafted and designed business plan can show clarity and ensure that the investor sees what you see. It also can help you find an investor who matches your vision of success. To get financing, you will need a business plan detailing your short-term and long-term goals as well as how they are going to be achieved. Establishing this at the beginning of the process will be helpful when it comes to reviewing projections and progress with lenders. Business plan templates can be very useful in streamlining the process of developing a business plan. Not only do they allow for customization, but they are also flexible enough to accommodate changes to your company’s needs. Read our guide on writing a small business plan.
Components of an effective business plan
A good business plan should always start with a summary. This provides a description of the mission and what the company offers. More specific information, like pricing and marketing strategies, should be included in the next section. You’ll need to research the local market, demographics, pricing, and best practices for your specific industry. Banks and investors also want to see projections that show you can be profitable. Indeed.com has a great article on how to forecast revenues and expenses. An effective business plan includes the following sections:
- Executive summary including company description, mission statement, and benefits
- Pricing, marketing, and general sales strategies
- Market research and potential locations
- List of initial products and services
- Revenue and expense forecast for the first year
Fund your Colorado startup
NOTE: Investors want to know the average costs for each business stage so that you can find out if it’s possible to get financing and update your plan as necessary. Before you apply for funding, estimate build-out, and rent costs and include them in your business plan.
Obviously, startup costs will vary by trade, but you can get a pretty solid idea by researching the product, equipment, rent, storage, and business licensing costs before you spend a dime. Check out our Colorado startup packages for real-time business startup fees and turnaround times.
Here are a few places to start looking for startup funding:
- One of the best ways to fund your startup is by using personal savings, home equity, and retirement accounts. You’re borrowing from yourself, so there is less risk than if you were borrowing money from other people.
- The Federal Reserve Survey of Consumer Finances reports that about $89 billion each year is borrowed from relatives and friends for startups. As much as 38% of small business startup funding comes from close friends and family. Relatives and friends should be rewarded for investing in your startup, so consider offering interest on loans, free products, or services from your business. Debt.org shares valuable tips on borrowing startup funds from friends and relatives.
- A quick internet search for angel investors reveals thousands of funding opportunities. The traditional angel investor is usually wealthy and makes that wealth available to startups in exchange for a cut of their business. Sites like startengine, Gust, and Funded.com are great places to start raising startup capital.
- SeedInvest, Kickstarter, and IFundWomen offer crowdfunding options with simple account setup and navigation to help you start a successful fundraising campaign.
TIP: Investors are impressed by a creditworthy business. Bills, payroll, taxes, and business fees should all be processed in a timely manner to build good business credit.
Related Helpful Resources
Write a Stand-Out Business Plan | Which Entity is Right for My Business? | Learn How to Build Business Credit
3. Apply for a Federal Tax ID (also known as Employer ID Number, or EIN)
All US companies must have an Employer Identification Number to hire workers. DBAs are only required to have an EIN if they hire employees, but using one reduces the risk of personal identity theft. Applicants with a Social Security number can apply for an EIN online at the IRS website. International business owners may have to provide additional documents and must apply by phone.
You’ll need your EIN to open business bank accounts, hire workers, and file tax returns for your business. A ‘’Doing Business As’’, or DBA is optional if you don’t have employees, but we recommend applying for one to separate business from personal matters and help protect against identity theft.
TIP: You can add an EIN application to any business package. We’ll submit your application and let you know when the EIN is available.
4. Open a Separate Bank Account for Business
The best way to keep business and personal finances separate is to open a bank account just for business. This will also help you establish business credit. Start looking for business banking services with your personal bank or credit union. If they don’t offer business banking, you can search the internet or contact one of our business banking partners to find the right business options. Each bank has different requirements, so make sure to interview a few before making a decision.
5. Lease or Buy Business Space
Depending on the kind of business you’re starting, you may be able to save on startup costs and overhead with a home office. If you’re not able to work from a home office, a commercial real estate agent can help you find working space within your budget.
Need a commercial leasing broker? Check out our Vendor Network for qualified agents.
6. Business Licenses and Permits
Most companies are not required to register with the federal government, but you will need to be licensed in the state where you do business. Licenses and permits vary for different businesses, so you’ll need to contact your state and local business authorities to get the right permits and licenses.
Save time and money. Order a business license compliance package with any business startup order. Our partners will make sure you get the right licenses to run your business.
7. Apply for Business Insurance
Your company may have additional insurance requirements, but common policies are listed below.
- Owner’s Policy
- General Liability
- Workers’ Compensation
Our insurance partners Hiscox and netQuote offer free estimates and can find the right business policies for your company.
8. Set Up Accounting and Organize a Filing System
You don’t have to be an accountant to manage your books. Accounting software like Quickbooks Online is easy to set up and use. If you’d rather have a professional bookkeeper or accountant, you can find a list of qualified financial professionals in our Vendor Network.
Every business generates some kind of paperwork, whether it’s invoices, employee forms, or other records. In our experience, the easiest way to manage paperwork is to organize a filing system before the paper starts piling up. Invoices, receipts, legal, and tax records need to be organized so you can find them easily. You don’t need anything fancy. A paper filing cabinet will work, or you can set up cloud storage. All that matters is that the system works for you. Your business will likely need to keep files for the following categories:
- Customer records – contact information, contracts, invoices, etc.
- Employment records – All employee documents, including applications, annual tax forms, reviews, disciplinary actions, etc.
- Vendor Files – Contact information, product information, contracts, and open/paid invoices
- Legal Documents – Original business formation paperwork, licenses, permits, lawsuits
- Tax Documents – Tax returns with company information, employee tax filings, tax deposit receipts
IMPORTANT: Tax returns must be kept for at least seven years after the filing date. Most other paperwork can be kept for 3 years, and some should be kept for the life of the business. Read our Business Record guide for more information.
9. Recruit, Interview, and Hire Staff (Optional)
Skip to Step 10 if you’re working alone.
Recruit the right team
If you have written your business plan, you can use it to tell you what kind of help to hire. Are you running a customer-facing business? You’ll want to recruit team members who are not shy and are good with people. If you’re running a data company, you may want to hire staff members with strong math and analytical skills. It may seem trivial, but businesses lose tons of time and money on wasted interviews and bad hiring decisions. Whatever business you’re running, finding the right people is critical to your success. Some skills can be taught, but you want to hire employees who align with your vision and can represent your business well.
Learn how to develop and motivate your team
Online job forums are a great place to recruit both full-time and part-time staff. Indeed, LinkedIn and local job sites attract loads of potential candidates. Keep these tips in mind before you post your job ads for the best results:
- Develop a training manual and invest in training
Policies about things like company conduct, uniforms, and procedures should be clearly defined in your training manual. Make sure to add a signature page so your employees can sign off to acknowledge they have read the manual. You can use free templates to write your training manual.
- Write a job description for each position
A well-written job post that includes expected tasks, environment, and general business model is the best way to attract the right applicants. Taking the time to write a detailed job post for each position will reduce unqualified applications and unnecessary interviews. If your business has special requirements, like heavy lifting or working after normal business hours, say so! Candidates like to know what they’re getting into with a new company, so listing as many details as possible helps them decide whether or not to apply for open positions at your company.
TIP: Expect to interview around 10 applicants to fill one position.
- Interview qualified candidates and hire your team
On average, each job post receives 26 applications, but you may see hundreds of applications, just for one position! Don’t be afraid to eliminate applicants who don’t have the right set of skills. Hiring qualified candidates will save on training expenses and employee turnover. Indeed.com offers expert recruiting tips to help you hire a quality team.
10. Market Your Business
Custom domain name, website, and email
A business website has largely replaced traditional yellow page ads. Even if you don’t sell online, your website is likely the first encounter customers will have with your business. 70% of potential customers are more willing to buy from a business with an active website. It doesn’t have to be elaborate, but your website should at least have posted business hours and contact information so customers can find you easily. If you’re catering to locals, register your free local business profile with Google My Business for additional exposure.
Need help? Our exclusive Domain, Website, and Email (DEW) package is a great place to start. We also offer an E-Commerce option for online stores. You can add DEW services to any Colorado startup package.
Start a Colorado Business Today
MyCompanyWorks offers the exclusive Startup Wizard to walk you through the startup process for LLCs, Corporations, or DBAs in Colorado. Access the Startup Wizard free when you order a Colorado startup package.
Summary
The Colorado business landscape is booming, and thousands of startups are settling in the Centennial State. The top categories for Colorado startups are technology services, real estate, construction, retail, and health and well-being services. We have also discovered that businesses that deal in health foods, ethnic fare, snow sports, or tourism are popular and very successful. Whether you’re starting a business in one of these categories, or any other business, you can start the process now by taking the steps in this article, or by following our Colorado startup guide.
If you have followed our guide, your business should now have an effective business name, a solid business plan, insurance, funding, and an Employer ID Number, so you can hire employees. We also recommend opening a bank account to separate business and personal finances. Once you have these items in place, you’re ready to write an employee training manual and hire your team (if you need help). Online recruiting sites like LinkedIn and Indeed can help you find the right team quickly.
Now that your business is formed and your team is in place, it’s time to get the word out about your business! A custom website, domain name, and email address are affordable and ideal if you want to attract the most customers. 70% of all consumers choose to buy from companies that have a website, so having a website is better than publishing a yellow page ad. You can buy a website package on its own, or add it to your business startup order.
MyCompanyWorks can start your Colorado LLC, Corporation, or DBA in as little as one business day. We offer comprehensive packages for any Colorado business. Visit our blog for more helpful guides, tips, and resources to build a successful business.
Answers to Common Business Questions
Our Frequently Asked Questions (FAQ) page answers many of the most common startup questions. Our friendly support team is also standing by to help your start your dream business.
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